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Choosing a law firm – does trust win out over cost?

Choosing a law firmClients choosing a law firm may take several factors into account. It may just be a simple case of affordability. Recommendations from family, friends and colleagues all play a part. These are all anecdotal ingredients, but what is really going on in the minds of clients?

At long last, a substantial body of empirical evidence has arrived. The biggest ever study of the subject was published recently by LawNet. – the collaborative non-profit network for independent UK law firms.

LawNet aims to help its firms grow and be successful in their individual markets. It does this by encouraging them to win and keep clients by fostering a culture of excellence in order to cut costs and increase profitability.

Its research reveals the real client motivations and highlights the cultural shift needed by firms to match growing expectations. Let’s see what it had to say.

How was the research conducted?

When I say big, I mean big – the biggest ever undertaken in the UK legal sector. The study includes satisfaction surveys carried out on almost 70,000 legal clients. This was topped up by 5,000 anonymous experience reviews.

The whole process took six years to complete and forms part of LawNet’s ISO9001 Excellence Mark. You can find out more about that by following this link.

So, is it cost or trust?

The recent introduction of price transparency rules is a game changer. Law firms have to publish their charges up-front. However, according to the report, reputation and trust are more important motivators for clients choosing a firm.

The bald statistics are:

  • Price accounts for only 4% of new business wins.
  • 67% claimed reputation and trust were the real determinant.
  • Of the 67%, 30% comprised existing clients.
  • 19% came through recommendation.
  • 17% judged based upon the “people and character of the firm”.

That’s a clear statement that cost, whilst still important, has taken a back seat.

Is the cost issue dead and buried?

Quick answer: no!

You might balk at paying £150,000 for a car. The same would probably be true if you were paying £150 for it. The report revealed two very different kinds of cost differentiator. Understanding how the charging (and billing) system operates so that unpleasant surprises don’t occur came out top. Clients also wanted to understand the benefits of using the firm. They measure this in terms of updates on work progress. So, it’s more a case of value for money than raw cost. Choosing a law firm just got a little more sophisticated.

This is similar to recent findings by The Law Society. Clients struggle to differentiate between legal service providers. Yet only 28% of firms explain the benefits of choosing them. SRA research also makes interesting reading. It suggests 95% percent of lawyers think they explain the charging system clearly. Only 70% of clients agree.

LawNet’s Helen Hamilton-Shaw stated:

Many lawyers see negotiating as part of their core skill set. Yet our research suggests there is often a skills gap when it comes to talking about costs with clients. But it is an issue that responds well to targeted action, once firms know they need to develop skills. Across the network, the way that walk-in enquiries are handled has improved by 24% in the past four years, and the way that staff handle a potential sales lead, by asking for permission to follow up on the enquiry, has shown a massive 41% improvement.

We have clear evidence that this process of measurement and support can drive significant performance improvements in firms. LawNet firms are almost 20% ahead of the sector in delivering the sales experience needed to drive new business and 13% ahead in terms of overall client satisfaction.

Hamilton-Smith added that the figures come from anonymously conducted experience reviews.

Room for Improvement?

In 2012 / 2013, overall satisfaction recorded in the benchmarked surveying across all firms hit 89%. After targeted action, it is now 97% – 13% higher than the sector as a whole, according to the LCSP Tracker Survey 2018.

By itself, that does not mean that everything in the garden is rosy. Many firms have plenty to do when it comes to eliciting reviews from clients. And that means using them to improve service levels.

Finally, there is the question of fully utilising technology to make the client experience better. Half of the art of getting referrals from existing clients is doing a good job for them in the first place. The other half is staying in touch with them so that they remember you and pass on your details. Most law firms use some form of practice management software. Few of them use it to its full capacity.

Good software should include a Client Relationship Management module. Yours probably does – so, use it! It’ll help you keep in touch with clients and that means new business and referrals. Choosing a law firm is a key decision for clients. Help yourself by helping them to choose you.

Mike O’Donnell, October 2019.

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